Winston Peters, leader of New Zealand First, is calling on Fonterra to provide explanations regarding the sale of its consumer businesses to the French dairy company Lactalis.
However, the co-operative has stated that those answers are already accessible to the public.
Fonterra has committed to selling key brands such as Mainland and Anchor for $3.845 billion.
The addition of Bega licences, owned by Fonterra’s Australian operations, increases the total sale proceeds for the consumer and related businesses to $4.22 billion.
The sale includes a long-term agreement under which Fonterra will continue to supply raw milk and dairy ingredients to Lactalis.
The deal is anticipated to be finalised in the first half of next year, contingent upon receiving regulatory and shareholder approvals. Shareholder voting is now open, with a virtual special meeting scheduled for October 30 to decide on the matter.
Peters urged farmers to consider the deal “very carefully” and raised concerns about the actual duration of the long-term agreement.
“Whatever the number, the clock will stop, and New Zealand’s milk will become just another in a long line of milk jugs,” Peters said.
“What stops Lactalis from diluting ‘New Zealand’ products with vegetable fat and lower-quality milk?”
He also raised concerns about whether Fonterra executives would receive bonuses related to the deal and questioned if they intended to leave the company once the sale was completed.
Peters described Anchor as a flagship, high-quality brand with growth potential and said selling it for $4 billion was essentially “giving it away.”
“No successful milk futures market exists globally – so why does Fonterra think it will succeed where others have failed?”
“Other dairy giants, like the company they seek to sell to, thrive because of their consumer brands.”
In 2019, Peters also voiced his disappointment over the sale of Tip Top.
He said the decision was about more than just business for the farmers involved but “a business decision for a country called New Zealand that since 1850 has been backing this industry.”
“And as a nationalist party, which we are, we want to know what’s happening in the national interest.”
Peters said he had spoken with Fonterra three weeks ago but had yet to receive the answers he sought.
Meanwhile, a Fonterra spokesperson stated that the company has been engaging with farmers for 16 months to explain the strategic reasons behind the divestment and that the terms of the supply agreement with Lactalis have been publicly disclosed and included in the 2025 financial year annual results.
The raw milk supply agreement has an initial duration of 10 years, while the global supply agreement is set for an initial term of 3 years. Both agreements are set to automatically renew unless terminated, with a required notice period of 36 months.
According to the spokesperson, no bonuses would be paid to management linked to the completion of the transaction.